MANILA (Mabuhay) – Senate President Pro-Tempore Ralph Recto has filed a resolution seeking to increase the cap on the 13th month pay, Christmas bonus and other benefits exempted from income tax.
Senate Bill No. 256 seeks to increase the cap to P75,000 from the current P30,000. Any amount in excess is already subject to the Tax Code.
Recto said the ceiling was set by law almost 20 years ago.
“We owe it to the people to amend laws that tend to be more repressive rather than be beneficial to the people. In this bill, we intend to breathe life again to the spirit of the law that, during the time of its passage, intended to allow the people to enjoy more of their hard-earned money,” he said.
He said the P30,000 cap, set in 1994 via Republic Act 7833, no longer applies today.
“At that time, the lowest monthly basic salary for government employees (Salary Grade 1, Step 1) was P2,800 and that of the President of the Philippines (Salary Grade 33) was at P25,000,” he said.
At present, he added, the basic salaries have been adjusted such that SG-1 Step 1 now stands at P9,000 and SG-33 is at P120,000.
Recto, former National Economic Development Authority (NEDA) chief, said the ceiling estimates is based on the Consumer Price Index (CPI).
If the cap is increased, it would translate to a higher take home pay.
“It is of paramount importance that our laws be responsive to the needs of the people. An increase in the ceiling of the 13th Month Pay and other benefits to be exempted from income tax is one of the reliefs the people need during these hard times,” he said. (MNS)